Even with a Scholarship and Parents’ Help, She Faces a 25-Year Student Debt Burden

Jaclyn Imondi in her cap and gown with her sister

May 31, 2017

Instagram. Brunch. Student loan debt. What do these things have in common?

They’re all part and parcel of the life of the modern-day millennial. The times have changed, and the financial responsibilities and burdens of young people have changed too, meaning that making the decision to go to college and paying for it — both before and after graduation — is very different today than it was a few decades ago.

Jaclyn Imondi

This was the case for Jaclyn Imondi, who at 16 began talking with her parents about how to pay for college. “I had made an agreement with my parents that they would pay the upfront tuition while I was in school, but the loans would all be on me,” says Imondi. Her parents paid for two-thirds of the cost of tuition and room and board, and she had a partial scholarship; Imondi took out loans to cover the difference. “So it was pretty much if I wanted to go to school and I wanted to do this, I had to take out loans. It was never really a second thought for me.”

AAUW’s new research report, Deeper in Debt: Women and Student Loans, chronicles the changing landscape of U.S. college costs and student debt over the last few decades. In 2015, 68 percent of students graduating with bachelor’s degrees had student loan debt. The average amount of debt for those students was $30,100. Postsecondary degrees have become increasingly necessary to secure a well-paying job, but the cost of postsecondary education is rising, too, with the cost of attending college doubling between 1976 and 2014. Because the average American household’s earnings have not increased to match the rising cost of tuition, more and more prospective students are accepting student loan debt as a given in pursuit of higher education.

The choice to take on student loan debt at such a young age — when many prospective postsecondary students are still lacking in financial literacy — is not uncommon; in hindsight Imondi admits she “didn’t really grasp what [student loan debt] would mean” when she was 16 and facing the difficult transition between high school and choosing and enrolling in a college.

Luckily for her wallet, Imondi’s academic career progressed on a quicker time line than most students’ do: She graduated from high school with enough credits to finish her bachelor’s degree in rehabilitation and disability studies in three years and was able to dual enroll in her graduate program in rehabilitation counseling during her third year of college and finish her graduate degree in two years. But on top of the demands of accelerated undergraduate and graduate school, she also had to work part time to pay the bills. While 70 percent of postsecondary students work while enrolled, balancing work and school is a delicate act: Students who work more hours while they’re enrolled are less likely to graduate than students who work fewer hours. Women students who work while enrolled also experience the effects of the gender pay gap, making about $1,500 less annually than men who work while enrolled.

In four and a half years, Imondi, now 22, obtained both her bachelor’s and master’s degrees. She was finally ready to enter into the workforce — and to begin paying off her student debt. Imondi estimates that, given interest rates, she’ll have paid around $68,000 by the end of her 25-year fixed payment plan. Many borrowers enroll in the standard 10-year payment plan, but Imondi is among the 9 percent who enroll in extended repayment plans, which allows borrowers up to 30 years to pay off their debt. That means that the next 25 years of her life will be shadowed by student loan debt. For Imondi, that means adjusting to having debt while still transitioning into the workforce and building up savings, putting extra money toward her monthly payments when she can in case she’s short on money in the future, and accepting that the major purchases that are seen as a standard part of life may need to be put off.

“I can’t build my savings account any faster, and I can’t lower interest rates, and I can’t lower the housing market prices, so I’m kind of stuck,” she says of wanting to buy a house. “I’ve been making different decisions. … I’m trying to scatter things so I know I’ll have the money but also I’ll be able to make the purchases of what I’ll need.”

Many young people today face the challenges Imondi is facing now — and, given the rate of increase of college tuition, the necessity of a postsecondary degree, and the slow increase of the average earnings of the American household, many more students may face more severe versions of these challenges in the future. With Deeper in Debt’s recommendations for changes in public policy and for higher education institutions, AAUW is working to help change that future.